Fee backlash — 75% would quit UPI
A LocalCircles survey reported by Business Today found nearly 75% of UPI users said they would stop using the payments platform if transaction fees were imposed, highlighting extreme consumer fee sensitivity that echoes into app‑store payment debates. (businesstoday.in)
Nearly 75% of Unified Payments Interface users in a LocalCircles survey said they would stop using it if transaction fees were introduced. (businesstoday.in) Business Today reported on April 11 that only about 25% of respondents were willing to keep using Unified Payments Interface, or UPI, if charges were added. Fortune India reported the same survey also found 57% had faced at least one merchant in the past year refusing UPI and asking for cash. (businesstoday.in) (fortuneindia.com) UPI is India’s bank-to-bank instant payments network, run by the National Payments Corporation of India, and it processed a record 22.64 billion transactions worth ₹29.53 lakh crore in March 2026, according to National Payments Corporation of India data cited by ANI. That works out to roughly 730 million transactions a day. (aninews.in) The fee fight centers on merchant discount rate, the processing fee merchants pay on many digital payments. Since January 2020, India has kept merchant discount rate at zero for BHIM-UPI and RuPay debit card transactions through changes to the Payments and Settlement Systems Act and the Income-tax Act, according to the Finance Ministry. (pib.gov.in) That zero-fee rule did not end the cost debate. In August 2022, the Reserve Bank of India published a discussion paper on charges in payment systems and asked for public feedback on whether UPI should continue with a zero-charge structure. (rbi.org.in 1) (rbi.org.in 2) The government has kept backing the free model with subsidies instead of user or merchant fees. On March 24, 2025, the Union Cabinet approved a ₹1,500 crore incentive scheme for low-value BHIM-UPI person-to-merchant transactions up to ₹2,000, with a 0.15% incentive for small-merchant payments. (pib.gov.in) The Finance Ministry also pushed back when reports resurfaced in June 2025 that merchant discount rate could return on UPI. It said speculation about charging merchant discount rate on UPI transactions was “completely false, baseless and misleading,” according to Economic Times and NDTV. (economictimes.indiatimes.com) (ndtv.com) The pressure point is scale. The Reserve Bank of India’s Payment System Report said UPI’s share of India’s digital payments ecosystem rose from 34% in 2019 to 83% in 2024, making any change to pricing a mass-market issue rather than a niche fintech dispute. (localcircles.com) (rbi.org.in) The survey result suggests that after years of zero-cost use, even a small fee could push many users back toward cash or other payment methods. For now, official policy still says UPI should stay free, and the state is paying part of the bill to keep it that way. (businesstoday.in) (pib.gov.in)
